Minimizing Personal Tax Liability
Our hope is that you filed your personal taxes on time and avoided the penalties for non-compliance. Even more to hope for is that your tax bill for 2017 – 2018 is not too high.
If your tax bill does seem a little high this time around, we hope it is high simply because you have had a good year. Most of the times however, a high personal income tax is not because of increased income but because of turning to tax advisers to handle this issue for you.
That is not to say that accountants can’t proficiently give tax advice, they can. We are only driving that tax advisers should be left to handle everything to do with your taxes while accountants should be left with accounting only.
However, there are those of us who still prefer using their accountants to calculate their tax rather than using tax advisers, this article is here to help you minimize your tax liability.
1. Allowances, reliefs and credits
Some of us may ignore the credits and allowance but it is important to take advantage of this in order to minimize ones tax liability. Most individuals however, do not know where the reliefs can be made.
Regarding your income
The mode of receiving ones income has an impact on ones tax liability. One possible way of reducing ones tax liability is by receiving ones income in form of dividend rather in form of money. The other viable way of reducing your tax liability is by paying more pension contributions and combining this with other retirement tax planning to make sure that even upon retirement you keep paying less.
ensuring that you invest in a tax efficient manner.
More to this, one could invest in humbe ISA as well as enterprise investment schemes.
One should have a broader tax strategy in order to be able to avoid some of the obvious risks that are associated with various investment options.
Other kinds of taxation
Domicile taxation refers to the tax differentials related to where one lives. The remittance basis charge might be a less costly option for you or perhaps a dual contract agreement could mean your tax bill is reduced. Even considerations of where you want to retire could positively impact upon your tax bill.
Planning before hand for your tax.
If you are one of those earning more than ?150,000 per annum, then bespoke tax planning might well open your eyes to what great tax planning actually is.
Offshore tax planning and wealth planning can offer fantastic opportunities for tax efficient wealth maximisation and this form of planning is far more accessible than you might think.
All of us tend to be risk averse and a simple way to do this is to do a forward planning.